tv Bloomberg Markets Bloomberg June 30, 2016 10:00am-11:01am EDT
♪ vonnie: we are going to take you from new york to london to milan and cover stories in boston and johannesburg, south africa. another shock in the u.k.. former london mayor pulled out of the race to succeed prime minister david cameron. to unify therns party. unleashed a financial market crisis. he says it will be a great calamity for the eu and the refugee influx. spearheade new ceo to italy's largest bank.
about 30 minutes into the trading session in the u.s. let's head to the markets desk. julie: after the two-day rally in the s&p 500, things are taking a breather. investors taking back. the nasdaq turned negative slightly. you could call three major averages unchanged on day five following the u.k. vote. if you take a look at the groups that are moving -- energy shares are really leading the downturn. seems as though oil traders were first to start to selloff. that has been leading the decline. consumer staples holding up well counterbalancing the downward move in energy. look at oil prices and the downturn we saw earlier this morning. while prices were already lower.
around 7:00 a.m., it took a sharp trajectory down about 2.9%. if you look at individual oil stocks, they are selling off the most. i wanted to check on the banks that have been a big part of the trade over the past few days. afterave not changed much the approval of capital return plans with the exception of deutsche bank after the close of trading yesterday. jp morgan stanley, holding onto gains to some extent. around 10-year note -- 7:00 a.m., a bit of buying coming into the treasury market in the yield a lower. -- treasury market and the yields go lower. this comes after a two-day
drop of 1025% on friday. friday.% on the worst performance today -- morgan stanley is reassessing european banks to reflect the possible impact of brexit. lloyds, bnpludes , clydesdale and handles bank. these of the banks since last friday, only one bank rising, hsbc. the industry is down 17%. luna credit is down. replace planning to federico. more on that later. a lot of been head -- a lot of
been said about the ftse 100. it posted its losses post brexit. since friday, it is up by one half of 1%. ftse --e stocks on the have now declined double-digit since friday. the ftse 250 is down 7%. check out the big gainer and the big decliners on the ftse since friday -- the gold producer up 29%. down by a third of their value using -- losing 30% in the space of a few days. quite incredible. julie was talking about the 10 year yield. the spread between the u.s. and the u.k. 10 year yield has risen to its highest since, wait for --
u.s. bonds have risen by 6%. vonnie, of england, will do something when they meet july 14. vonnie: we may get a hint today and our 11:00 eastern. let's check in on bloomberg first word use -- first word news. lockdown because of an active shooter> it is 20 miles outside of downtown washington d.c. the president is not traveling today. said the incident is ongoing. first responders are on the scene. they tell everyone to shelter in place to keep people safe.
a stunning announcement in the u.k.. boris johnson says he will not run. you have waited faithfully for the speech, having consulted colleagues and what the circumstances, i have concluded that person cannot be me. >> johnson helped lead the campaign for britain to leave the u.k.. competing to be the next prime minister. turkey has made more than a dozen arrests in the airport suicide bombing attack. turkish media says 13 suspects had been detained. three of them are described as for nationals. they blame the islamic state the
bombings. a twin suicide attack on a convoy killed 37 people and wounded 40 others. it took place in kabul. the first suicide attacker struck training buses. the second attacker targeted people rushing to the scene to help. global news 24 hours a day, powered by 2400 journalists, in more than 150 news bureaus across the world. i am taylor briggs. vonnie: thanks. there is sign that tension is easing since last week's brexit vote. they are still sounding the alarm of the outcome of the referendum. >> it unleashed a crisis of the financial markets. toparable in severity only 2007, 2008.
this has been moving inflammation -- this has been moving in slow motion. vonnie: our next guest knows that while the brexit vote is a big deal to the u.k., it is much less to the global economy. what makes you so sure, david, we have seen in the past that one illness in the market can take a -- to analyze a situation in terms of politics and financial markets. a political perspective, it is a disaster for the united kingdom. it could break up scotland. they will have a very tough time negotiating with europe. for europe, i don't think another country want to follow britain. britain will be a cautionary yale and tell voters you ma
not do it because you will have a recession if you do. britain is less of 1% of global gdp. i don't think it has a big impact. vonnie: what george soros was saying was mainly for his own purposes? >> i think he is completely wrong in this. i believe britain should of stayed in. it is a big deal for them. they will regretted in the years to come. when i look at the economics of it, when i look at financial it doesn't really affect the global economy that much. the key about financial crisis at her the economy is allowing the other shoe to drop. i don't know what this british decision would cause with other
-- mark: minimum two years. look back at history, traditionally it takes longer than two years to achieve the sorts of things. how do we as investors sort of try and behave during that period? had to be get our heads around that? -- how do begin our heads around that? david: the rest of europe will be in no hurry to come up with an agreement. if you are a global bank, global manufacturing or firm, you may avoid the u.k. altogether and just located in frankfurt or dublin because they are in the euro. poison for the british economy. it may not make much difference
for the global economy. mark: you said that investors that could take advantage of the overreaction of german investors may be able to profit from britain's self-inflicted wound. explain how? david: there is a lot of negativity in global markets. we have seen a bounce back in u.s. stocks. we are seeing bury -- very low yields on the u.s. bond. but people are missing if there is a pickup going on in economic growth. we're looking at growth between 2% and 3%. we are looking at consumer growth -- consumer spending over 4%. i think we will see a split from fixed income into equity that includes a rebound in earnings. people should look at what the numbers are going to do not concentrate on the politics of brexit. vonnie: how does the central banking environment change 1000% in the last couple of weeks?
david: the central banking cannot turn. there is there he do little they can do -- there is very little they can do. britain's problems cannot be solved with lowering money. vonnie:. the federal reserve could be on hold for a lot longer. david: the federal reserve should not be on hold because -- on hold unless they can see damage to the u.s. economy. they will use this as an excuse for not moving in july. they still could move in september and they certainly showed at the u.s. economy is moving. the labor market is tightening. we had the lowest unemployment claims since the year 2000. u.s. economy is tightening. u.s. inflation will go up as low prices go up. the federal reserve these to take that into account. political stability
arrives in the u.k., david, ninthday in september the when the u.k. conservative party announces their leader, is that phase one? i know there is a lot of phases. is that the first big hurdle we have to get over? david: i think that is the smallest hurdle for britain. europe will not be in any mood to negotiate. i am surprised that anybody want the job prime minister. they are trying to negotiate with no cards. europe will look for a very tough deal with britain and britain will not be able to get a better one. the prime minister will be blamed for not getting a better deal, but they have no want to negotiate with. is scotland. seeill be interesting to how the scots will preserve their relationship with europe.
2019, will be a scottish referendum. is that the base case? david: it is certainly something to think about. i don't want to put strong probabilities on this one way or the other. there are a lot of things that could happen. the one big risk for britain is that united kingdom breaks up because of this decision to leave the european union. mark: david kelly, chief global strategist at j.p. morgan. coming up, a look at the stocks moving in the early u.s. seion. behind the "hunger games" franchises by a well-known cable franchise. more on this 4.5 billion dollar deal. more on that next. this is bloomberg. ♪
vonnie: we are monitored reports of a active shooter on the base. security says the situation is unfolding. toy tweeted instruction structure in place. it is ongoing at the malcolm grove medical facility. the white house is saying vice president joe biden is the lanky joe biden is -- delaying his trip to ohio. julie: let's talk about the
blake -- about the big movie media deal. there have been talks about the two begin talks for so long. this is the culmination for this speculation. stars holding onto a gain. both of these stocks on the move higher as it looks like investors were happy with this deal. seeing a sharp downturn. perhaps it will bring stability to both companies. lions gate has been buffeted by the return of his movies. franchise, imes believe we have a chart from the revenue of about $3 billion for those four movies. phillyhat, there was not an obvious -- that was not
really an obvious successor to it. moving on to mediate today, we got earnings from a couple of companies. pier 1 imports and tractor supply, both of them coming in below as defense. -- coming in below estimates. it is all lower than expected sales in the second quarter and does not anticipate a shift to significant sales. tractor has held up relatively well in the retail-wide downturn. mark: 3:19 london. it the race for the next prime minister starting to shake up. we will discuss who is and who is out. boris is out. this is bloomberg. ♪
"bloomberg markets." i'm vonnie quinn in new york. mark: and in london, i'm mark barton. boris johnson unexpectedly ruled himself out of the process. now that he has pulled himself out of the race, what not -- what now? if we didn't think could get things -- as if we didn't think things could get more dramatic. >> it was the most exciting day since yesterday when it comes to u.k. politics. a cane pretty much out of the blue. we did have some inkling. certainly, this is a dramatic day. a lot of people will look at -- a lot of people
will look at boris johnson. mark: favor to when it? -- favored to win it? headlines will be dominated -- i was looking at the statement that she gave. it is incredibly detailed. no second referendum. very, very clear on that. interestingly enough, looking at what you said about fiscal policy. she has very clearly walked away from -- a lot of commentators listen to her this morning.
not only the content but her assurance. long way to go. today has been a good day for her. vonnie: there are five candidates that through their hat in the ring. remain crabb was a candidate. rate their chances. it is going, it is hard to handicap it because it is a long way to go. cerebral. a was very weeks ago, he clear coming out saying he did not want to be prime minister and does not have the right personality to be prime minister. those are not the sort of words
you hear coming out of the mouth of winners in the races. looking at the broader field, there is no obvious, leading charismatic figure like boris johnson, who has the star quality. it will be very interesting to see how it plays out. last time we had a campaign, david cameron came from nowhere to win it. today, -- we have three others who aren't that well known to the public. , theyhe next few months had the opportunity to set up. oness of course they agree the unity candidate. mark: it was quite an assassination job. talking about boris johnson. talkinge point, she was
about her negotiation skill. and then she made a reference to board johnson, the best thing he got from europe was on the german government. there was a funny moment where she was suppressing her laughter -- her laughter when a reference to boris came up. -- sa mark: john, good to see you. 3:26 in london. ready for the close. stay with us. ♪ you guy's be good. i'll see you later
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"bloomberg markets." i'm mark barton in london. let's check in with the bloomberg first 14. taylor breaks has the first word. >> the base is on lockdown due to an active shooter. it is located 20 miles from downtown d.c. the president is not traveling today. sections toent and shelter in place. a second tweet says the incident is ongoing and as at malcolm growth medical facility. the white house says vice president biden not be traveling until the situation resolves. -- the state forces rebel force launched what appears to be a poorly conceived
assault in east in syria. the new president of the philippines will focus on fighting crime. today andas sworn in said he would curtail crime and corruption. police have killed dozens of drug years -- drug dealers. clinton has picked up an endorsement from europe. thecoise alonso is backing likely democratic nominee. the trump election would hurt europe's ties with the u.s. michelle obama is calling for young girls and young women to help her global girl initiative. the first lady talked about the struggle girls face trying to get education in many countries. let girlsmoting the learned should have.
global news 24 hours a day, powered by 2400 journalists, in more than 150 news bureaus across the world. i'm taylor riggs. vonnie? ♪ bloomberg is focusing on pharma, going deeper on biotechnology. gates hasfounder bill made its addition of his foundation to wipe out diseases around the world. gates sat down with bloomberg's erik schatzker talking about vaccines. >> vaccines has still in the tool that has saved the most lives. fornventing new vaccines hiv, malaria, tb, a number of these diseases that are still
out there killing millions of people that is a top priority for us. erik: and other areas like gene therapies, how much promise to they have relative to the easier work, that can be done indexing development? -- back seen development? bill: it will pervade all the work in the biological sciences. those tools, even for diagnosis, doing gene knockouts, understanding disease models, you don't understand how what grateful they are. we've seen them in plant and animal work. they will speed up that are plants and help on animal disease. those other regulatory pathways are complex and not as hard as
human disease. for mosquitoes, this is a superior system to affect mosquito populations that are carrying the virus. hiv/aids, it like is possible although there is a lot of hurdles that you can do gene editing to cure someone from the disease. that would be fantastic since we don't have a cure. we just have lifelong treatment. i see it in so many of the foundation programs. erik: many of the most advanced remedies are expensive to develop. the companies behind them are incentivized to generate the maximum profit possible. , butthinking of valeant also the price of treatments and immunotherapy and blood disease drugs. what in your mind is the best way to control costs so these
medicines and treatments aren't just available to the rich and well insured? i think the current system, despite extreme cases that have been improperly mislabeled as an appropriate, i take the current system is better than most other systems one can imagine. curing hepatitis c, this is a phenomenal thing. now you have multiple drug companies competing in terms of the quality and the price that they are offering. the drug companies are turning out miracles. budgets.heir they need to see the opportunity. for things like alzheimer's, they can reduce medical costs so dramatically, and improve the human condition, and the pharmaceutical companies make great partners of our foundation. when we need help in doing
science, their unique and what they can do and they are good about pricing. if you take hepatitis c as an example, and all of the responsible companies do this, wasn'ts an approach making money. tiered pricing is one way to square access and find new miracles. you really want both. mark: bill gates with erik schatzker. we should highlight that you could read more on the terminal as well as bloomberg.com. julie: monfils has made a takeover for hershey. dow is reporting that on the
lease sent a letter to -- mom elendez -- hersey shares have halted. triggers.o see the that is why we have this temporary halt. that is where we are seeing for hershey shares. i am taking a check on the bloomberg. melendez up 2%. we will bring you more details as we get them. gets still ahead, google rated in spain -- raided in you what will tell investigators were looking for
google says the are cooperating. last month, french investigators raided google offices in paris. mark: plans to bring more diabetes drugs to a place that needs them -- china. >> we are eager to make sure these products can be brought to market because there is a strong need for it. at the moment, new products come into china five years or more later than the eu and u.s. it could benefit chinese patients. mark: the biggest ill ever in the beer industry -- the biggest deal ever in the beer industry is one step to being completed.
anheuser-busch, $4 billion takeover. there are some conditions. they have to sell its stake in a south african liquor company. vonnie: time now for our bloomberg quick take what we provide context on issues of interest. saudi arabia's bast oil wealth -- vast oil wealth -- we explore how they plan to navigate the post-oil future. >> women still cannot drive. saudis are attached to crude oil. this is what has changed -- oil revenues have collapsed the global process in the country can no longer afford general -- generous handouts for its
citizens. in 2015, the king recused his throne. up -- d quickly built , the prince launched a plan to transform the air of world's largest economy. -- it could be the largest ipo. than $2 control more trillion. that is big enough to buy the largest for companies in the u.s. cutting subsidies for basics like electricity.
here is the argument, saudi arabia has trying to diversify away from oil for years but it has not been effective. the economy is still powered by foreign workers who make up 80% of the private workforce. efforts to get more saudi's into work has been met with apathy and they are running out of time. with a half $1 trillion in foreign reserves, the good times are over. nearly half of saudi arabia's citizens are under 25 and make up a third of all unemployed. in the past, any potential challenge to the system was saved by the social contract. the reforms could put him at
odds for altar conservative clerics who wield great power. saudi is confronting a future of cheaper oil in a country where oil is everything. vonnie: that is your global business report. for more stories, visit bloomberg.com. -- there is no active shooter at the base. the base tweeted, all clear. ahead, italy is getting a new chief executive bringing back a former employee to help its turnaround. we will go to milan for the latest and much, much more on banking. --k schatzker will interview this is bloomberg.
"bloomberg markets." i'm vonnie quinn in new york. mark: live in london, i'm mark barton. vonnie: that started in asia as the shanghai composite index dropped. off one point three quarters of a percent. -- indian distro industrial performance is dropping. it >> production fell 2.3% from may to april. they were expecting a fall of 2/10 of 1%. at that too bad retail sales figures and add to the worries that the economy is on shaky ground. brexit will strengthen the yen increasing corporate earnings. month, low rises 2.5% on
but do not get too excited. finance official says it was a base effect after a bad market in april. yvonne man, bloomberg, japan. mark: stocks are rising for the third consecutive session. check out the stoxx 600, the ftse, the dax -- two days of gains before today of 5.75%. bestgame since friday -- gain since friday. the five-day dropped 5.8%, but stocks are rising for the third consecutive day. resurgence has come to an end. they have seen a choppy session. sterling dollar down with little one .34 euros down.
euros down against the frank. the inflation data out of the eurozone. i will explain later. gdp in the u.k. rose. the u.k. 10 year yield up by a basis point. why this since 2000? the german 10 year yield is down a basis point as well as spain's and italy's. up for the indices are tenths of 1%. the dow up 73 points. the nasdaq up just 3/10 of a percent. we also have a look at yields that gives us a barometer of where things are heading. the 10 year yield is going nowhere. it was down from 150 earlier. as you can see, the vicks is
below 16 once again. the dollar index also getting weighed on slightly. have gold. ind futures are coming $13.17 an ounce. mark: looking at some of the biggest stories in the news. south africa is announcing its biggest trade. machinery and oil fell as well as precious metals, stones surge. interview,lusive south africa's minister of finance noted there were other reasons the nation is attractive to investors. >> if you take a long-term view, south africa is an excellent place to the end. these things are all relative.
when you have extreme uncertainty like other political developments in the european context, we actually look relatively stable and in a good place to be in. mark: he said it is unlikely that south africa will fall into a recession. u.s. regulators are skeptical that a big insurance deal will go through. the justice department told anthem that it's $40 billion takeover threatens competition. according to a person familiar with the matter, regulators probably say it cannot be fixed by some part of the businesses. that is your latest bloomberg business flash. so italy's biggest bank is bring back his former banking boss to run its company. he has been named the next chief executive to spearhead the bank's overhaul.
for more on what it means for the bank, let's go to dan the screen -- let's go to dan. what is on his to do list? dan: the top of the list is to address a pseudo-that is been address -- to address a question that has analysts have asked. get rid of bad loans. clearly the capital rights, the capital increase, the potential rights issue is an issue. -- the outgoing ceo argued that they did not need a capital increase. his banking experience, i would think there is a good chance that we will see a capital increase anywhere from five to 10 billion euros. that is the range that analysts
have been giving. mark: it comes against great angst for the entire italian banking industry and has been-since the exit vote -- and has been heightened since the brexit vote. but will it take to inject 40 billion euros into the banking industry? clearly, the options are were on the table at the beginning of the week are kind of clinging to the table after the european summit this week. opposition so far to some of the ideas of the direct injection of capital to italy's plans. this will be an issue that will take several days, if not weeks, to get resolved. what we have seen is apparently, a move to increase the firepower, if you will, of the
fund set up to help out some of these weak banks doing capital operations. the atlantic funds -- that will probably be going ahead. it is a less controversial thing and does not require a lot of european bedding, if you well. from a he comes corporate investment taking background. was he tried to change the strategy at all? yeah, clearly that was an issue in the selection process. it took about a month. while he had three years of experience at the bank between 2011 and 2014, that was heading the investment banking unit in some shareholder probably would have preferred that the have someone who had more retail banking experience. nevertheless, i think the fact that he is an insider and an
outsider at the same time, shows the shareholders one to go deeper into some management changes. i would bet more yes then know on management shakeups. vonnie: thank you. mark: all my fault. sorry, vonnie. it over eager, it is all about mark carney carrying his address one week after the u.k. vote to leave the eu as he looks to reassure global investors. and erik schatzker will interview barclays chief executive. it this is bloomberg. ♪ . .
deliver a reassuring message turmoil ands of carnage -- let's bring in our chief economist at bloomberg intelligence. institutiontable amidst the instability in westminster. the trouble for carney is he cannot speak as the mpc as a whole. no measures or anything like that. but he can offer messages of wassurance, that it carrying growth momentum -- mark: he's just walking in right now. let's cross over there. spend some want to time